The Habit Restaurants (HABT) Slides on Post-IPO Euphoria

Shares of Irvine, California based The Habit Restaurants, Inc. (HABT) fell on Tuesday, against the backdrop of a mixed market on Wall Street overall. The stock was down $4.54 per share, falling 13.16% to close at $29.95, on volume of 2,321,576 shares. The decline was a pullback from a strong rise in the stock since it's initial public offering last Thursday.

The Habit Restaurants, Inc., operating as The Habit Burger Grill, is a "fast casual restaurant" concept that specializes in preparing fresh, made-to-order char-grilled burgers and sandwiches featuring USDA choice tri-tip steak, grilled chicken and sushi-grade albacore tuna cooked over an open flame.
The first outlet opened in Santa Barbara, California in 1969, and the company now operates 113 restaurants in ten markets, mostly in California, but also in Arizona, Utah and New Jersey.

On Tuesday The Habit Restaurants announced the closing of its initial public offering of 5,750,000 shares of its Class A common stock at a public offering price of $18.00 per share. The number of shares issued at closing included full exercise of the underwriters' over-allotment option of 750,000 shares. The company received approximately $92.4 million in proceeds from the offering, net of underwriting fees and estimated expenses.

The lead book-runners for the offering included Piper Jaffray & Co., Robert W. Baird & Co. Incorporated and Wells Fargo Securities, LLC., with Raymond James & Associates, Inc. acting as the book-runner for the offering, and Stifel and Stephens Inc. as the co-managers for the offering.

A registration statement relating to these securities was declared effective by the Securities and Exchange Commission on November 19, 2014. This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful, prior to registration or qualification under the securities laws of any such state or jurisdiction.

The stock opened on Thursday at $18.00 per share, and went as high as $40.25, rising nearly 120%, before pulling back on Monday and Tuesday. The IPO was unexpectedly well received given the crowded field in the burger market, leading analysts to predict that IPO's will follow by other upstart competitors in the market. Smashburger and Checkers are rumored to be future candidates.

The Habit Restaurants sales were up nearly 50% in the first three quarters of the year compared to the same period of 2013. Net income has soared more than 60%.

Consumer Reports listed The Habit Burger as having the best hamburger in the country in July, beating out 65 other chains, including McDonalds (MCD), Burger King (BKW), Five Guys and Smashburger.

Other News About The Habit Restaurants
Consumer Reports Rates The Habit as the Top Burger
The Habit Burger is the best in the land.
Habit Restaurants doubles in debut
Habit IPO doubles on first trading day.

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Published on Nov 26, 2014
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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